To the delight of parents, and the consternation of students, the beginning of a new school year is only a month away.  If you have school-age children, and especially if you have fast growing ones like me, I hope you will take advantage of the back-to-school sales tax holiday this weekend.  From August 6^th through August 8^th, Virginia's sales tax will be waived on eligible clothes, shoes, and various school supplies.  A complete list of items and frequently asked questions are available at www.tax.virginia.gov.

Government Reform and ABC Stores

While July is traditionally a quiet month, that certainly wasn't the case this year.  Since its first meeting in June, the Governor's Commission on Government Reform and Restructuring has met more than a dozen times.  The commission is broken into four committees, including Consolidation of Shared Services, Customer Service/Transparency/Accountability, Intergovernmental Relations, and Simplification and Operations.  While each of these areas is important, the issue that seems to have generated the most conversation is the proposed privatization of our ABC stores.  I've received emails from several constituents about this, and will devote an edition of my newsletter to the issue once the proposal is better defined.  Currently, there are four general approaches being discussed.  For my part, I am trying to keep an open mind.  Having lived in Virginia all my life, I think our ABC stores are well run - and our state employees do a great job.  ABC stores also bring in more than $110 million annually in profit, not including the revenue generated from sales and other taxes.  However, if it is possible to maintain that revenue, increase consumer choice, reduce prices through competition, and ensure that there isn't a liquor store on every street corner in Virginia - then I am open to the idea.  However, this is too important not to get right, and so I will be looking at the fine print with a skeptical eye.

The Budget "Surplus"

In July, Governor McDonnell announced a "surplus" for our FY2010 budget.  In reality, what this really means is that our very dire revenue predictions weren't quite as bad as predicted.  Nonetheless, it is better than the opposite problem.  One of my concerns, however, is that this surplus will not be used to pay back the nearly $700 million in deferred payments to the Virginia Retirement System that was used to balance our budget.  That money will need to be paid back, with interest.  In that sense, we really didn't have a surplus at all.  Although the money is going to laudable purposes, I believe that protecting the long-term health of the VRS must be a priority.  I am aware of at least one potential bill to require repayment to VRS when there is a surplus - which I am inclined to support.

Health Care Reform in Virginia

This past Wednesday, I attended a meeting of the Joint Commission on Health Care where Secretary of Health and Human Resources William Hazel provided an overview of Virginia's Health Reform Initiative.  The purpose of the VHRI is to prepare for implementation of federal health reform at the state level.  Notwithstanding various lawsuits, there are many elements of reform that are not subject to legal challenge.  Of most immediate concern is how to deal with the expansion of Medicaid eligibility, which is expected to increase enrollment in Virginia from 270,000 to 425,000 over the next decade.  Some of the immediate reforms that Virginia must also plan for include a ban on lifetime limits on essential health services, restrictions on annual limits, restrictions on when an insurer may rescind a policy, and a ban on denying coverage for pre-existing conditions in children.  The federal law also changes the appeals process and restricts profit taking by health insurance companies.  In many cases, there is no counterpart in Virginia law to the federal law, while in other cases there are outright conflicts.  Since many of the new provisions go into effect on September 23rd, the federal government will technically be responsible for enforcement until the General Assembly changes state laws in the next session.

Despite the length of the federal law, there are still many outstanding decisions that need to be made that will have significant policy implications.  For instance, one of the immediate reforms is that insurance companies may no longer establish a lifetime cost limit for certain "essential" benefits.  While this is generally described in the federal law, a major challenge for federal regulators and the states will be to further refine what this means.  After the meeting, a representative from the March of Dimes came up to me and noted that one thing that hasn't yet been included as an essential service is neonatal care for prematurely born babies - something that can easily consume a lifetime limit in just a few months.  The point is, we have our work cut out for us in Virginia to get this right.  As an aside, I promised the folks at the March of Dimes to mention the importance of folic acid in decreasing the risk of birth defects and premature delivery - great advice for anyone who is expecting or knows someone who is expecting.  More information can be found here.

Finally, happy birthday to the Virginia House of Delegates, which turned 391 years old on July 30^th.  I have also posted my 2010 Report from Richmond, which is a summary of significant legislation that passed during the 2010 session, on-line at www.davidbulova.com.  Please don't hesitate to contact me if you have any questions or feedback.

Have a wonderful weekend!